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Third Federal Savings and Loan (OH)

4.00% 6-Year CD at Third Federal Savings & Loan - Nationally Available


Third Federal Savings & Loan is offering a 4.00% APY CD for a term of 72 months. The minimum deposit is $500. Other competitive long-term CD rates include a 3.50% APY 60-month CD and a 3.25%% APY 48-month CD. Minimum deposit is $500. These rates are listed in the bank's CD rate table as of 2/19/09.

I'm sorry to say that 4% is now competitive for a 6-year term. That's a long term when there's a lot of concern over future inflation. All the government spending could cause inflation and higher interest rates in the next few years. However, there's no guarantee that will happen. It didn't happen in Japan in the 90's.

If you want to hedge your bets and include a long-term CD in your savings portfolio, two important features should be considered: 1) small early withdrawal penalty and 2) a financially strong institution. Third Federal offers both.

A small early withdrawal penalty is important if interest rates rise significantly during the CD term. The longer the CD term, the more likely this will happen. A small penalty will reduce the loss of withdrawing money from a low-rate CD. According to the Third Federal savings disclosure, the early withdrawal penalty for terms over 1 year is 180 days of interest on the amount withdrawn. This isn't the smallest penalty, but it's better than many other banks.

A financially strong bank is important so that your CD doesn't end prematurely. If your bank fails, the FDIC will most likely arrange for your deposits to be assumed by another bank. That new bank has the option not to honor the rate of your CD to its original maturity. You don't have to worry about losing any insured principal or interest up to the day of closure, but you do have to worry about finding a comparable investment if the new bank chooses to close the CD.

For the issue of financial health, make sure you don't confuse Third Federal with Fifth Third. Unlike Fifth Third Bank, Third Federal is in good shape financially. As this news article describes: "Third Federal has escaped the severe losses that have rocked many banks because it didn't focus on risky lending in recent years." Its fourth quarter 2008 performance was lower than in 2007, but it remains profitable, and its stock price continues to be in the double digits. The ratings for safety and soundness also indicate a strong bank: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. These ratings are based on 9/30/08 data.

When I last contacted Third Federal, I was told that people in any state could open the CDs through their online application. For more details about Third Federal CDs, please refer to my July 2008 Third Federal CD post. I described issues related to opening and closing Third Federal CDs. Please be sure to contact Third Federal for the latest information.

For those who prefer opening CDs at a branch, Third Federal's branches are located in Ohio and in South Florida.

The bank has been FDIC insured since 1938 (FDIC Certificate # 30012).

Other Long-Term High Certificate of Deposit Rates

The best deals for long-term CDs continue to be at credit unions. These include a 4.50% APY 60-month CD at Mountain America CU, a 4.39% APY 60-month CD at Pentagon FCU and a 4.37% APY 60-month CD at Northwest FCU (rate has recently fallen). For more details on these, please refer to my weekly CD rate summary.

Related Pages: CD rates, Third Federal Savings and Loan (OH), Cleveland, Miami, Tampa, West Palm Beach, Ft. Myers

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Anonymous   |     |   Comment #1
4% for 6 years? A sucker play.
Brian F
Brian F (anonymous)   |     |   Comment #2
6 years :( you would have to be crazy to fall for that offer.
Anonymous   |     |   Comment #3
I agree 6 year cd's are crazy. Would like to know from the people on this blogg who understand banking and interest rates better than me what interest rates we can expect when our banks are nationalized. Yes, you heard me correctly I said when not if. BAC stock down from about $55 to $4 and C also down from about $55 to 2.50. Remember CW, Ind-Mac, and WaMu when their stock dropped below $5. They were taken over by " so called" bigger and stronger banks. Do you think there are some bigger and stronger banks out there to take over these two or do you think the Gov will be running them. My bet is it will be the Gov. and we know how well the Gov runs things. Anyway, care to guess what the interest rates will be when this happens probally later this year.
Anonymous   |     |   Comment #4
What's going to affect interest rates is the trillions of dollars the government is printing to cover all the bailouts. Excess money in circulation usually causes hyperinflation although there is also a chance, a smaller chance in my opinion, that we may have stagflation.
Anonymous   |     |   Comment #5
I think you will find various opinions on banking and interest rates.

First I think when our banks are nationalized their interest rates would be in line with the Treasury rates. After all, the Feds then would be controlling both.

Now again, in my opion, there is a very good chance we have a severe case of Stagflation on the horizon.

You will probably get as many opinions as there are bloggers. Only time will tell who guessed correctly.
Anonymous   |     |   Comment #6
BAC now trading at 3.25 and C just traded under 2.00 . Ever hear the old saying you should cheer up cause things could be worse so I cheered up and sure enough they got worse. Well, our black messiah says things are bad and they are going to get worse so every time he opens his mouth they sure as hell get worse. Market dropped 80 points while he was talking today. Where are all the Bush bashers that use to post on here. Do you like what you voted for. I guess many of the people who post here are older and retired like me.What did you hear in the grand plan that Nancy, Harry, and Obama cooked up that is going to help you. That big $250 you are getting won't go far when the inflation hits down the road. What they are doing is nothing short of child abuse on my grand children. Guess I will close by saying cheer up and ????????????????????????????.
Anonymous   |     |   Comment #7
Take own advice:

Anonymous   |     |   Comment #8
Would I rather be lied to and told everything was peachy like the last 8 years? Not!
Anonymous   |     |   Comment #9
This whole economic meltdown was created by the past administration and the problem now is the current administration doesn't know how to fix it. It certainly is not going away anytime soon. Too much political wrangling on both sides.
Anonymous   |     |   Comment #10
This whole financial mess all started because of the following:
1) Banks making loans they had no business doing
2) People pushing up real estate prices and buying homes that they had no business buying
3) People putting money into these subprime debentures

So who is to have the ultimate blame? The president or Congress? I don't think so. More like someone with a BBA, MBA or PhDBA degree is more to blame since they packaged and created this entire mess.
Anonymous   |     |   Comment #11
"So who is to have the ultimate blame? The president or Congress? I don't think so. More like someone with a BBA, MBA or PhDBA degree is more to blame since they packaged and created this entire mess."

Smart but heartless people, they got rich while leaving the whole country holding an emty bag and the working class going through all the pain and suffering.
Anonymous   |     |   Comment #12
"Smart but heartless people, they got rich while leaving the whole country holding an emty bag and the working class going through all the pain and suffering."

Yep, you got that right.
Bozo (anonymous)   |     |   Comment #13
Folks, it's all about money management.

OK, a seven year CD at PenFed sounds lame, but is it? If you are 59 1/2, and can get over 4% in what is, essentially, an interest-bearing checking account, it's not too shabby. You can make "normal distributions" from PenFed's IRA accounts.

Anonymous   |     |   Comment #14
Whether it's lame or not depends on how interest rates go in the future. If within that 7 year period, rates shoot above 8%, you will be left in the dust as inflation eats away at your earnings. If it stays somewhere at 4% or below during that time period, then obviously, you made the right choice. Back in 1985, I didn't buy the 14% 30 year Treasury bond because I didn't think interest rates would drop. Well that was proven wrong as you see it now. When rates are very low, it is foolish to lock in for the long term. When rates are very high, it is better to lock in for the long term unless you think it will go higher.
Anonymous   |     |   Comment #15
That is precisely why I jumped on Pen Fed's 6.25% CDs both for my I.R.A. and personal Accts. two years ago.

I would not do that for just 4% in today's environment even though I have additional funds now available for more CDs. And I am over 59 1/2.